Explanatory Statement

Issued by the Authority of the Minister for Revenue and Assistant Treasurer

Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991

Section 7 of the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991 (SMSF Act) provides that the Governor-General may make regulations for the purposes of section 6 of the SMSF Act. Section 6 provides that the regulations may prescribe a levy payable by Self Managed Superannuation Funds (SMSFs) and a due date for the levy.

Section 353 of the Superannuation Industry (Supervision) Act 1993 (SIS Act), section 50 of the Superannuation (Unclaimed Money and Lost Members) Act 1999 and section 200 of the Retirement Savings Accounts Act 1997, respectively, provide that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.

The purpose of the Regulations is to remove lost member and lost Retirement Savings Account (RSA) holderprotection against account fees, in order to implement one of the recommendations of the Productivity Commission's 2001 report on superannuation legislation. The Regulations also amend the "eligibility age" for unclaimed money in lost accounts and make minor technical amendments to align due dates for self managed superannuation funds (SMSFs).

The Regulations:

·
remove member-protection for lost members of superannuation funds ( Items 1 to 9 of Schedule 2 );
·
remove RSA holder-protection for lost RSA holders ( Schedule 4 );
·
raise the "eligibility age", at which the superannuation benefits of women who are lost members become unclaimed money, from 60 to 65 ( Schedule 3 );
·
align certain due dates for SMSFs ( Schedule 1 and Item 12 of Schedule 2 ); and
·
correct a drafting error in Schedule I A to the Superannuation Industry (Supervision) Regulations ( Items 10, 11 and 13 of Schedule 2 ).

EXPLANATION OF PROVISIONS

Regulation 1 - Name of Regulations

This clause is a formal provision specifying the mode of citation of the Regulations.

Regulation 2 - Commencement

The regulations will commence on gazettal.

Regulation 3 - Amendment of Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991

This clause provides that the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Regulations 1991 are amended as set out in Schedule 1.

Regulation 4 - Amendment of Superannuation Industry (Supervision) Regulations 1994

This clause provides that the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations) are amended as set out in Schedule 2.

Regulation 5 - Amendment of Superannuation (Unclaimed Money and Lost Members) Regulations 1999

This clause provides that the Superannuation (Unclaimed Money and Lost Members) Regulations 1999 are amended as set out in Schedule 3.

Regulation 6 - Amendment of Retirement Savings Accounts Regulations 1997

This clause provides that the Retirement Savings Accounts Regulations 1997 are amended as set out in Schedule 4.

SCHEDULE 1 - AMENDMENTS OF SUPERANNUATION (SELF MANAGED SUPERANNUATION FUNDS) SUPERVISORY LEVY IMPOSITION REGULATIONS 1991

Items 1 and 2 specify a due date for the supervisory levy paid by SMSFs. The new due date is the same as the due date for lodgement of the annual return of a SMSF, which is set under section 36A of the SIS Act.

SCHEDULE 2 - AMENDMENTS OF SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS 1994

Item 1 amends the note to subregulation 1.03A(3). The note identifies the consequences of a member becoming a lost member. The amendment will remove the reference to a trustee's obligation to protect the lost member's account balance. Item 1 also updates references to certain disclosure obligations on funds, which were previously prescribed in the SIS Regulations, but are now prescribed in the Corporations Regulations 2001.

Items 2 and 3 omit subregulation 5.01(3) and regulation 5.15A, which deal with situations in which the member-protection standards have "only lost member operation". These Regulations remove the memberprotection standards to the extent that they apply to lost members, so the concept of the standards having "only lost member operation" is obsolete.

Items 4 to 8 remove all references to lost members from regulation 5.17. As a result, the member-protection standards will apply in respect of protected members but not lost members.

Item 9 amends subregulation 5.22(1), which determines the date of effect of a member's election (under Division 5.6 of the SIS Regulations) not to be treated as a protected member. The amended regulation will take account of the removal of lost member protection. This item preserves, in subregulation 5.22(1)(a), an earlier provision relating to the date on which a member's election to waive member-protection takes effect.

Items 10 and 11 amend the definition of "eligible temporary resident visa" in subregulation 6.01(2), including the note, to refer correctly to the renumbered Schedule 1AB (see Item 13).

Item 12 amends paragraph 8.03(a) to prescribe a due date for audit reports by SMSFs. The new due date is the same day as the due date for annual returns from SMSFs. The due date for annual returns is set under section 36A of the SIS Act.

Item 13 renumbers the second occurrence of Schedule 1A. The Schedule will become Schedule 1AB. This amendment corrects an earlier drafting error.

SCHEDULE 3 - AMENDMENT OF SUPERANNUATION (UNCLAIMED MONEY AND LOST MEMBERS) REGULATIONS 1999

Item 1 inserts a new regulation which prescribes 65 as the eligibility age for women.

SCHEDULE 4 - AMENDMENTS OF RETIREMENT SAVINGS ACCOUNTS REGULATIONS 1997

Item 1 amends the note to subregulation 1.06(3). The note identifies the consequences of an RSA holder becoming a lost RSA holder. The amendment will remove the reference to an RSA provider's obligation to protect the lost RSA holder's account balance. Item 1 also updates references to certain disclosure obligations on RSA providers, which were previously prescribed in the SIS Regulations, but are now prescribed in the Corporations Regulations 2001.

Items 2 and 3 remove all references to lost RSA holders from regulation 3.12. As a result, the RSA holderprotection standards will apply in respect of protected RSA holders but not lost RSA holders.